Money and Emotions

I’ve been meaning to write about money and emotions for a while now.  Yesterday, I felt inspired to do so after reading a blog entry entitled “Why Financial Literacy Fails (and What to Do About It). In it, the author states that the behavioral aspect to spending needs to be  addressed as much as financial literacy does, if not more.  All behavior is ruled by our emotions, so why not also look at money from an emotional perspective?

Money is a deeply emotional part of everyone’s lives, but it gets treated as if it exists apart from our emotional world.  If  we take something that triggers deep emotions and treat it as if it doesn’t, those emotions are still operating, but without our awareness.  This is much like letting small children play unsupervised; just because it is quiet in the other room doesn’t mean all is well.  Just because we say that money isn’t triggering our emotions doesn’t mean that it isn’t.  If we bring awareness to our emotions about money, we can gain more control over how we deal with our finances.

An example of this is emotional spending; “retail therapy” is a well-known phenomenon where someone feels blue and goes out and buys a bunch of things to feel better, rather than face the sadness they feel.   Retail therapy makes about as much sense as dealing with a sliced thumb by going shopping.  You may be distracted for a bit from the fact that your thumb is bleeding, but in the end you still have to deal with it, but now you are out some money, too.  There are other ways that emotions can affect how we deal with money.  Maybe you’ve been settling for less than a decent wage because you are afraid to face the emotions that come up when you picture asking for a raise, trying to get a better job, or even starting your own business.  You may feel as if you’ve escaped facing those emotions, but in reality they are ruling your life, because your wages are now being dictated by your fear.

Take some time to really explore just how your emotions rule your financial world.  Notice what you tell yourself about the things you buy, the job you have (or want), the clothes you wear.  See if you can build in a little pause every time you do anything that has to do with money.  You might find an emotion in there that wants to be dealt with.  Deal with that emotion, and you may just save yourself some money.

Share if you are inspired.